massas Week 4 Assignment.docx 100% Tables Charts SmartArt s Charts rt Review Par

Question

massas Week 4 Assignment.docx 100% Tables Charts SmartArt s Charts rt Review Paragraph Normal No SpacingHeading 1 Heading 2 Week 4 Assignment 10 Points a) What are the three functions money should be able to perform in our economy? (Minimum 50 words) b) Explain the three main ways the Federal Reserve can change the money supply in the economy? (Minimum 100 words) c) If the Federal Reserve is following a restrictive monetary policy by lowering the money supply in the economy, what will be its effect on the equilibrium outcome in the economy as it relates to real GDP and the price level? Explain using AS-AD analysis. (Minimum 100 words) c 1 Pages:1 of 1 Words: O of 91

Explanation / Answer

A) Money is used as a medium of exchange which solves the problem of barter system which is based on the double coincidence of wants. It also used as a unit of measures. For every things today price is determined in money whereas without money it would be difficult to have many exchange rate or exchange price. It is also used as a standard of deferred payment. Deferred payment are payments made in future which can be fixed in monetary terms.

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